Monday, August 17, 2009

New Hires and the Stock Market

From the Bureau of Labor Statistics, a chart showing new hires as a percentage of the employed population (from the Job Openings and Labor Turnover Survey).

(Click on chart for more detail.)

There is a correlation with the stock market up-move in early 2002 and then the final bottom for that cycle in early 2003. Again, the chart correlates well with the market top in late 2007. The fall from March 2009 in this ratio does not correlate with the strong stock market move up since March.

Will this relationship reassert itself, either by vigorous new hiring in excess of the stock market moving higher, or by the stock market moving down to catch up with the continuing deterioration in new hires, or by some of each?

For what little it's worth, I'm still hearing of layoffs for efficiency reasons, except for health care.